There are three types of Bankruptcy that a tenant might file:
- If you have a tenant that files for a Chapter 7 Bankruptcy, you will more than likely lose out on any back rent owed, and the tenant can be evicted AFTER the automatic stay is lifted.
- If a Chapter 11 Bankruptcy is filed, the tenant is attempting to restructure their debt, and they are working with the court to pay you back any rent that is due.
- When a Chapter 13 Bankruptcy is filed, typically by a smaller business, they are also looking to restructure their debt while paying you back. You may not have as high a chance of receiving all of the money that is owed to you, but if they stay in your property, you may have a better chance of eventually receiving the back rents.
If you are interested in setting up an estate plan or would like to talk more about this topic, give us a call at (702) 850-7998, or click here to schedule a complimentary, 15-minute phone consultation with our attorneys.